Automotive telematics is likely to make a quantum leap in the next five years, according to ABI Research. But the North American market researcher also warns that considerable risks to the forecast remain.

ABI Research expects the percentage of new cars shipping with factory-installed telematics to grow to 62 percent by 2016 from less than 10 percent last year. It cited the recovery in the global auto industry and increased carmaker willingness to incorporate consumer electronics in new cars as key factors.

“Initiatives such as the open-source GENIVI infotainment platform and Nokia’s Terminal Mode standard are creating high expectations and result in industry-wide cooperation,” ABI Research practice director Dominique Bonte said in a statement.

GENIVIis an automotive and consumer electronics industry association driving the development and adoption of an open-source in-vehicle infotainment platform. Terminal Mode is a proposed industry standard for the integration of mobile applications into cars.

Despite the optimistic adoption outlook, ABI Research warned that fragmentation in the telematics business threatens to squeeze out traditional telematics service providers as well as major automotive suppliers.

In addition, the researchers said safety risks and lack of clarity in impending telematics legislation in Europe and Brazil could slow down growth.

The telematics industry complains that it is unclear when and how eCall, Europe’s planned mobile emergency warning system, will be implemented. Brazil recently delayed mandatory vehicle tracking, which would reduce the country’s epidemic car-theft rate, by a year.